Wednesday August 18, 2010 - 03:58:15 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Morning Briefing : 18-Aug-2010 - 0340 GMT
The US equities were up on account of slight increase in housing starts, surge in industrial production and good numbers by Home Depot and Walmart yesterday. The Dow (10405.85) was up 1.01% and the S&P (1092.54) was up 1.22%. The Dow has moved above the important level of 10334 and we may see some period of a sideways movement before a break on the either side is visible.
Asian equities are mixed today. The Nikkei (9199.57, up 0.41%) is continuing to trade above the strong Support in the region of 9000-100 while the Shanghai (2662.94, down 0.34%) is continuing to trade below the important Resistance at 2700-50, which may now be broken for an upmove towards 3000 in the coming weeks. In India, the Sensex (18048.85) and the Nifty (5414.15) were flat yesterday. We need to see if Sensex honours the Support at 18000-50 in the next few sessions, which may decide the course of the markets for the coming days.
Crude (75.56) witnessed a rise yesterday following the US industrial production data release and the weak dollar thereby bringing in to an end the five consecutive days of downmove. The Support at 75 is holding as of now and if the US inventory data comes positive today then we might expect this Support at 75 to hold and see a bounce back in the coming days. A break below 75, might see 74.20-00 on the downside. Remember 74.20 (61.8% Fibonacci Fan line Support) is a very important Support level to watch for. To see the Crude graph click on the following link:
Gold (1226.50) is continuing to trade higher and is keeping up its overall bullish sentiment intact. A break above 1230 might take it further up towards 1250 in the coming days.
The Euro (1.2853) is ranged between 1.2800-2900. Failure to see a strong break above 1.2900 in its attempts made yesterday might continue to retain the downside pressure. 1.2750-30 is the important Support region to watch for. Dollar-Yen (85.39) is ranged between 85.00-86.00 within its overall downtrend. Euro-Yen Cross (109.68) is trading sideways between 109 and 111 within its broader downtrend.
Dollar-Swiss (1.0430) has continued to honour the Support at 1.0350-400, which may take it towards 1.0500-50 in the coming sessions today. Cable (1.5548) has honoured the Resistance in the region of 1.5650-700 and may now see some Support at 1.5500. Aussie (0.9013) has come down after testing the Resistance at 10.9050-75 levels and further fall towards 0.8950-00 can not be ruled out today.
In Asia, the Korean-Won is trading near 1179 and the USD-SGD is trading near 1.3559. Dollar-Rupee has closed yesterday 46.64/65. The Support in 46.60-50 region held very well yesterday and will have to be watched carefully in the coming days.
The 3M USD LIBOR was down 1 bps to be set at 0.35%. The 2Y yield was down 1 bps to quote at 0.49% while the 10Y yields were up 4 bps to quote at 0.63%.
08:30 GMT UK BOE Minutes
...Expected 1-0-8...Previous 1-0-7
July UK CPI Y/Y
...Actual 3.1%...Previous 3.2%
US July Housing Starts
...Actual 0.546 Mln...Previous 0.537 Mln
US July Core PPI (MoM)
...Actual 0.3%...Previous 0.1%
US July Core PPI (YoY)
...Actual 1.3%..Previous 1.1%
US July Industrial Production
...Actual 1.0%...Previous -0.1%
US July Capacity Utilization
...Actual 74.8%...Previous 74.1%
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